Saving Fannie Mae and Freddie Mac
The New York Times is reporting this bloated response: “WASHINGTON — Alarmed by the sharply eroding confidence in the nation’s two largest mortgage finance companies, the Bush administration on Sunday asked Congress to approve a sweeping rescue package that would give officials the power to inject billions of federal dollars into the beleaguered companies through investments and loans.”
This is the usual bureaucratic over-reaction. It’s not necessary.
TRY this four-step therapy instead:
1. Forget the bailout. No taxpayer money should be spent. Not one penny.
2. Make every purchase of stock in both those entities TAX-DEDUCTIBLE.
3. Exempt the stock from capital gains.
4. Sit back and watch the money pour in.
Yeah, this is probably too simple for the government to handle. But It could be done overnight.
